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Subprime lender Amigo Holdings scrapped its dividend and said it had seen a 'significant increase' in customer complaints in recent weeks, warning of a material increase in loan provisions for the full year.
The company also announced its chairman Stephen Wilcke had resigned on June 7, and said it would end plans to sell the company after failing to receive any other offers.
The update came as the company, in-line with regulatory requirements, had agreed a voluntary requirement with the Financial Conduct Authority to 'work through and reach a decision, before the end of June 2020, on a backlog of complaints which have arisen principally in 2020,' Amigo said.
The Financial Conduct Authority said last week it had launched a probe into the company's creditworthiness assessment process.
Amigo expected that the cost of clearing the backlog of complaints covered by the voluntary requirement would be at least £35m and could be 'materially higher.'
'In light of this increase in provision, the board believes that it is prudent to conserve capital in the business and thus will not be recommending a final dividend for the year ended 31 March 2020,' the company said.
At 10:15am: (LON:AMGO) Amigo Holdings Plc share price was -3.78p at 13.22p